What is xyz optimal capital structure

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XYZ Inc. is setting its target capital structure. The CFO of XYZ Inc. believes that the optimal debt-to-capital ratio is between 25 percent and 60 percent. Her staff derived following the projections. Various debt levels were considered. Debt/Capital Ratio Projected EPS Projected Stock Price Dept/Capital Ratio Projected EPS Projected Stock Price 25% $4.20 $40.00 35% $4.45 $41.50 45% $4.75 $41.25 60% $4.50 $40.59 Assuming that the firm uses only debt and common equity, what is XYZ's optimal capital structure? At what debt-to-capital ratio is the company's WACC minimized?

Reference no: EM133228320

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